USD Update

Currency mayhem this week caused a rally in most commodities as the US dollar
broke trend line support and headed lower in a sharp decline. Analysis today
will clue into the expected trend of the US dollar over the coming weeks ahead.

The daily chart of the US Dollar Index is shown below, with lower 21 and 34
MA Bollinger bands riding the index down, suggestive that a decline to the
lower 55 MA BB is possible (80.28). Upper 21 and 34 MA Bollinger bands have
curled up, suggestive that until they curl over, there will be further weakness
in the USD. Full stochastics 1, 2 and 3 are shown below, with the %K beneath
the %D in #1 and #2. Based upon extrapolation of the trend, weakness in the
USD is likely to persist for another 7-10 trading days before putting in a
bottom.

Figure 1

The daily chart of the USD Index is shown below, with upper Bollinger bands
starting to roll over, suggestive a top has been put in place. Full stochastics
1, 2 and 3 are shown below in order of descent, with the lower 55 MA Bollinger
band at 64.02, up from last week's value of 63.80. Full stochastics 1, 2 and
3 are shown below in order of descent with the %K above the %D in stochastics
1 and 3 and beneath the %D in stochastic 2. As per Figure 4, the USD index
is likely to decline to around 80 before putting in a bottom. One thing for
certain, when the %K falls beneath the %D in stochastic 3, it will trigger
significant weakness in the dollar. For now, expect a decline to around 79-80
and some stabilization before heading higher.

Figure 2

The monthly chart of the US Dollar Index is shown below, with the upper 21
MA Bollinger band well above the current level of the USD. Lower 21, 34 and
55 MA Bollinger bands are presently at 68.45, 70.43 and 69.81, differing from
last week's values of 68.10, 70.29 and 69.80, respectively. Rising BB values
are suggestive that a top of some form has been put in place. Full stochastics
1, 2 and 3 are shown below in order of descent, with the %K above the %D in
all three instances. The upward trend of the USD is still intact at present
on the monthly chart, even after the recent sharp downturn

Figure 3

The short-term Elliott Wave count of the USD index is shown below, with the
thought pattern forming shown in green. Last week I had wave (B) still in a
sideways consolidation pattern, but a break of the rising trend line indicated
wave C is underway. Once complete, wave [C] up should begin, which should coincide
with liquidation in the broad stock market indices.

Figure 4

The mid-term Elliott Wave pattern of the USD Index is shown below, with the
thought pattern forming denoted in green. Based upon the severity of the decline,
wave C should be complete in 2-3 weeks time, ironically around the point in
time the broad market indices are set to decline. As per Captain Hooks most
recent article, there could be a huge short squeeze in the S&P up to 1000,
but anyone trading such a move is required to be sitting in front of their
computer. After the S&P 500 Index completes its pattern, whether it is
a triangle going sideways or a rising terminal pattern, its decline below recent
lows will likely be attributed to a rise in the USD. Since the USD is still
the reserve currency of the globe, anyone caught in the squeeze will be forced
to liquidate.

Figure 5

The daily chart of the Canadian dollar Index is shown below, with the index
punching above the upper 21 MA Bollinger band. Full stochastics 1 and 2 have
the %K above the %D, suggestive that there is another 2-3 weeks of strength
at a minimum in the Canadian dollar.

Figure 6

The Australian dollar Index is shown below, with the index breaking above
the 21 and 34 MA Bollinger bands. Full stochastics 1, 2 and 3 are shown below
in order of descent, with the %K above the %D in 1 and 2. As per the Canadian
dollar, expect another 2-3 weeks of strength in the currency from down under.

Figure 7

The daily chart of the Euro Index is shown below, with a sharp move above
the recent bottom of early March. Full stochastics 1, 2 and 3 are shown below
in order of descent, with the %K above the %D in 1 and 2. Notice the %K in
stochastic 3 is curling up to cross above the %D, suggestive that the Euro
has another 2-3 weeks remaining, with an upside price objective of 145-146.

Treasure Chests is a market timing service specializing
in value based position trading in the precious metals and equity markets,
with an orientation geared to identifying intermediate-term swing trading opportunities.
Specific opportunities are identified utilizing a combination of fundamental,
technical, and inter-market analysis. This style of investing has proven to
be very successful for wealthy and sophisticated investors, as it reduces risk
and enhances returns when the methodology is applied effectively. Those interested
discovering more about how the strategies described above can enhance your
wealth; please visit our web site at http://www.treasurechests.info.

Disclaimer: The above is a matter of opinion and
is not intended as investment advice. Information and analysis above are derived
from sources and utilizing methods believed reliable, but we cannot accept
responsibility for any trading losses you may incur as a result of this analysis.
Comments within the text should not be construed as specific recommendations
to buy or sell securities. Individuals should consult with their broker and
personal financial advisors before engaging in any trading activities. We are
not registered brokers or advisors. Certain statements included herein may
constitute "forward-looking statements" with the meaning of certain securities
legislative measures. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results, performance
or achievements of the above mentioned companies, and / or industry results,
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Do your own due diligence.

Unless otherwise indicated, all materials on these pages
are copyrighted by www.treasurechests.info.
No part of these pages, either text or image may be used for any purpose other
than personal use. Therefore, reproduction, modification, storage in a retrieval
system or retransmission, in any form or by any means, electronic, mechanical
or otherwise, for reasons other than personal use, is strictly prohibited without
prior written permission.